Phoenix-based Freeport-McMoRan Copper & Gold is pressing ahead with the development of its Tenke Fungurume copper/gold project, in the Democratic Republic of Congo, and continues to hold talks with the country's government on proposed changes to the mining contract for the operation, a spokesperson said on Thursday.
Tenke Fungurume, in which Freeport owns an effective 57,75% stake, Toronto-based Lundin Mining holds 24,75% and DRC State-owned miner Gécamines owns the balance, is one of the 61 contracts being relooked at by the government.
Bloomberg News reported on Thursday morning that the DRC wanted to more than double its stake in the Tenke Fungurume joint venture, to 45%, citing deputy Chief of Staff at Congo's Mines Ministry Gaby Matshafu.
The project has been punted by Freeport as possibly the largest, undeveloped, high-grade copper/cobalt deposit in the world. The company acquired its stake when it bought Phelps Dodge in 2007, and has maintained since the beginning of the contract review that its agreement with the government was negotiated transparently and would hold up to legal scrutiny.
"We are currently working cooperatively with the government to resolve these matters while continuing with our project development activities," Freeport communications vice president William Collier told Mining Weekly Online.
Lundin said in a statement that it had noted the press reports, but that it had received "no official notification of any change in government attitude and is investigating" the matter.
The partners first received a letter from the Ministry of Mines in February, seeking comment on proposed "material modifications to our mining contract ...including the amount of transfer payments payable to the government, the government's percentage ownership and involvement in the management of the mine, regularisation of certain matters under Congolese law and the implementation of social plans", Collier said.
However, the company continues to maintain that its contract was negotiated transparently and legitimately.
It was "approved by the government of the DRC following extended negotiations, and we believe it is fair and equitable, complies with Congolese law and is enforceable without modifications", Collier added.
Lundin also "believes that its agreements with the government of DRC are legally binding, that all associated issues have been dealt with fully under Congolese law and that the overall fiscal terms previously negotiated and incorporated into the Amended and Restated Mining Convention exceed the requirements of the Congolese Mining Code," the company said in its statement.
The $1,9-billion Tenke Fungurume mine will initially produce an average of 250-million pounds of copper and 18-million pounds of cobalt, but Freeport has high hopes for significant expansions and even additional projects at Tenke Fungurume.
The current mine plan is based on ore reserves of about 100-million tons, with average ore grades of 2,3% copper and 0,3% cobalt, but the company believes there is the potential to triple the reserves at Tenke in the medium term, Freeport CEO Richard Adkerson said last month.